Watt v. Aylward

GATES, J. On April 3, 1909, the defendant, John Aylward set a fire which caused damage to certain property of plaintiff. Defendant was at that time the owner of a quarter section of land in Gregory county. On April 13, 1909, a deed of -the property to his brother Frank (.co-defendant herein) was executed and' acknowledged. On May 10, 1909, plaintiff (began an action in the circuit court of said county against John Aylward, which resulted in a judgment for damages in favor of plaintiff for $606:25-. Execution was issued and returned wholly unsatisfied. The next -day after the service of the summons in -that action, the deed above mentioned was recorded. The consideration of -said deed was $5,600, of which $50 was paid in- cash; a prior -mortgage of $700 assumed; and three promissory notes given by Frank Aylward to John Aylward, one for $1,650 due in April, 1910, one for $1,600 due in April 1912, and the other for $1,600 -due in April, 19x4. In February, 1912, the present action was 'begun. Both defendants answered 'by an answer served on- March- 2, 1912. The notes due in April, 1910, and April, 1912, were not paid when due but both were paid to John Aylward in August, 1912. The third note was unpaid at the time of the trial. The present action was brought to set aside the said transfer, as in fraud of the plaintiff’s rights, under the provisions of section 2368 C. C. The trial was had to the court. The fourth, fifth and sixth findings of fact are as follows: “4th. That at -tíre time of said transfer, defendant, Frank Aylward, paid the sum of $50.00 in -cash and1 gave his three promissory notes -in payment therefor. “5th. That after the maturity of 'two of said notes, one -for the sum of $1,600.00 and one -for the- sum of $1,650.00 .the said Frank Aylward paid to his said brother'John Alyward the sum -of $3,250.00 in payment of said- notes. “6th. That at the time of 'the payment of -said notes the defendant, Frank Alyward', -had notice of the claim -of plain-tiff and made payment thereof after the commencement of this action and after having answered herein and- thereby became a party to the [230] fraud of. John Aylward and not an innocent transferee of said property.” ■ - ■ As conclu-sdons of law, the trial. court found: “That the deed from John Aylward to Frank-Aylward.should be canceled and set aside, and Feld for naught as against the .plaintiff, and the plaintiff's judgment declared a lien against said ^ real property, subject only to the lien of taxe_s, the first mortgage against said land to the Peters Trust Company,. and the sum of $50.00 paid by Frank Ajdward before notice of -fraud.” Judgment was entered May 12, 1913, in accordance therewith and from such- judgment and the order denying a new trial the defendants appeal. , . [x] The sole ground of appeal argued is the,al-leged insufficiency of the .evidence to sustain the.findings. A .careful .review of t]he evidence fails to disclose that olear preponderance favorable to defendants which is necessary to-justify the setting aside of the findings of the trial court. In this case, the evidence on the. part of plaintiff was largely, circumstantial. The evidence on the .part of defendants- consisted -solely of the testimony of. defendant,. Frank Aylward. It is manifest- that -by its findings,1 the , trial court discredited- the portion of his testimony relating to his lack of knowledge of the fraud at -the time he paid' the first two notes. The court was justified in disbelieving such lack of knowledge because.of a stipulation in the record that .the .summons in this action, was served upon both defendants. . In Gingles v. Savings Bank, 33 S. D. 351, 146 N. W. 596, this court after reiterating .the above .rule as to the -clear preponderance of the evidence said: “We are convinced that the credibility of witnesses who testified at the trial must have been a .controlling factor, in the decision of die -trial court -and in. such cases- it would require most convincing circumstances to justify this court in reversing the findings' of the trial court.” The “convincing circumstances” which would authorize u-s to-set aside the findings of the trial, court are absent from this case. [2] The evidence clearly establishes- the fact that Frank Aylward had full knowledge of the -alleged fraud in the transaction at. least five, months prior -to the time -that he -parted with any consideration, -except the $50 and taxes paid1, even if .he was innocent of any intentional -participation in the fraud at the time of the [231] transfer. He therefore made payment of the two notes at- his peril. Fluegel v. Henschel, 7 N. D. 276, 74 N. W. 996, 66 Arner. St. Rep. 642. The judgment of the trial court protected his rights ás to* payments innocently made. Nothing was set forth in the findings or judgment as to the third note outstanding which it is shown is held by a third party. There is nothing to show that the land is not fully worth the amount of the purchase price, therefore any question as to appellant’s right of protection against that note became immaterial. Finding no error in the record, the judgment and order denying a new trial are 'affirmed.